The next-gen fiber space needs better tech tools. Canopy wants to help build them.
It’s no secret that material innovations have had a tough go of it lately, Carol Steuri, senior corporate campaigner of next-gen solutions at the Canadian forestry nonprofit noted in a webinar on Friday. Between the dearth of specific volume commitments that are the necessary lubricant for pushing novel fibers through the fashion supply chain to the collapse of its biggest success story, now turned cautionary tale, so-called “preferred” products are still struggling to launch from niche to status quo.
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Offtake agreements require companies to take long-term hedges on higher-margin products, which is a hard sell during times of economic stress and uncertainty. Even the most fervent champions of preferred fibers have found drumming up internal support impossible because the question of financing these changes often gets in the way of potential sustainability benefits.
All of which is to say that despite Renewcell’s nth-hour rescue by private equity firm Altor, it still remains to be seen if the rechristened Circulose can avoid the jaws of defeat from which it snatched some semblance of victory. Transforming fashion’s extremely entrenched supply chains is “hard, dedicated work,” Steuri said. And, “sadly,” preferred fibers’ environmental benefits aren’t enough of a motivating factor at the moment, she added.
What the sector needs, Canopy says, are mechanisms to create greater transparency through improved data-sharing. This could take the form of a B2B platform that aggregates demand, drives offtake financing and reduces duplicative expense.
“A lot of this work can’t be done through individual meetings and phone calls and paper orders,” Steuri said. “We know that greater transparency along the supply chain is needed to help pulp producers and all the value chain partners, all the way up to the brands, to effectively pull through these materials.”
Canopy has been working with consulting giant PwC and digital tool purveyor Neosphere for the past six to eight months, she said. While it’s still early days yet, there are “some” prototypes.
“We have stakeholders that are inputting into the design, and we hope to get some kind of beta projects onto the platform very soon to kind of test the hypotheses and see if this is actually valuable in the market,” Steuri said.
The overarching idea is to help innovators swerve that dreaded “valley of death” from lab to commercial viability. While there’s no shortage of venture money and R&D support, transitioning from pilot to industrial scale requires a suite of subsidies, whether in the form of feed-in tariffs, tax rebates or commercialization grants, that aren’t available yet, Steuri said.
“These will help with price, of course, enabling greater economies of scale,” she said. “We’ve seen it done with renewable energy and [electrical vehicles], and we need these similar models here for circular textiles.”
One of the problems with Renewcell, Steuri said, is that it didn’t have enough financial runway. Fiber producers were reluctant to snap up more dissolving pulp without the brand commitments and brands were taking longer than anticipated to align themselves to absorb and integrate the resulting fibers. While this could change—even as the mill in Sundsvall remains idle for now—because Circulose is no longer an unproven fiber with nascent quantities, those same lessons are relevant to other innovators trying to get a leg up.
“This underscored the need to have everyone step in together and assume the risks collectively,” she said. “And the same goes for the integration and implementation of new fibers across the supply chain.”
